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Investment company purchases hit record level over past 12 months

20 June 2017

Strongest ever 12-month period to end March 2017 with £777m in purchases.

Latest research from the Association of Investment Companies (AIC) using Matrix Financial Clarity has revealed purchases of investment companies by advisers and wealth managers on adviser platforms hit a record level over the 12 months to end of March 2017 at £777m.  This is 11% higher than in the year to December 2015 (£698m), which was the previous record for a 12-month period. 

In Q1 2017 adviser and wealth manager purchases reached £246m, the second highest quarterly figure on record. This is 85% higher than the same quarter last year (£133m) and an increase of 25% on Q4 2016 (£196m). The figure for Q1 2017 fell just 10% below the highest ever level of purchases in Q2 2015 (£273.9m), which was boosted by the launch of Woodford Patient Capital Trust. 

For the first time, Sector Specialist: Debt was the most popular investment company sector, accounting for 14% of all purchases in Q1 2017. Property Direct – UK, the top sector for the past two quarters, was the second most popular sector with 13% of purchases. 

Commenting on the results, Ian Sayers, Chief Executive of the Association of Investment Companies (AIC) said: “It is very positive to see adviser purchases of investment companies at a record level over the last 12 months and demand for training is stronger than ever. 

“The Property Direct – UK sector was the most popular investment company sector for the previous two quarters – no doubt due largely to the problems of open-ended property funds last year but it’s interesting to see that the specialist debt sector, which focuses on illiquid debt, has taken the top spot for Q1 2017. It seems that buyers on adviser platforms are becoming increasingly aware of the strength of the closed-ended structure for accessing illiquid assets.” 

Additional findings

  • Following Sector Specialist: Debt and Property Direct – UK as the most popular investment company sectors for adviser purchases were: Global (12%), UK Equity Income (10%), Sector Specialist – Infrastructure (5%) and Private Equity (5%).
  • Total adviser purchases of investment companies on platforms were £219m in 2012, £400m in 2013, £481m in 2014, £698m in 2015 and £663m in 2016. This equates to growth in total purchases of 202% between 2012 (pre-RDR) and 2016. The slight fall in purchases between 2015 and 2016 is accounted for by the spike in purchases in Q2 2015, when Woodford Patient Capital was launched. 
  • For Q1 2017, Transact remains the most used platform for adviser purchases of investment companies, with a 34% market share, followed by Alliance Trust Savings (23%), which has had a strong quarter, Raymond James (11%), Ascentric (11%) and FundsNetwork (9%).​

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Notes

  1. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment.  Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs.  The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. The AIC has 349 members and the industry has total assets of approximately £168 billion.
  2. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance.  The value of investment company shares, and the income from them, can fall as well as rise.  You may not get back the full amount invested and, in some cases, nothing at all.

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Annabel Brodie-Smith
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